January 16, 2011

Global Warming and International Fishery Management: Does Anticipation of the Temperature Change Matter?

by Xiaozi Liu and Mikko Heino

- This paper investigates the effects of climate-induced rising of ocean temperature on the optimal fishing policies in a two players non-cooperative game setting. We compare reactive management, under which the manager does not believe in or know about temperature trend, with proactive management where the manager considers the future temperature change in his decisions. We assume that the fish stock is initially solely owned by country one. As temperature rises, the stock starts spilling over to the zone of the other country and eventually becomes under its sole ownership. A stochastic dynamic programming model is developed to identify Nash management strategies for the two players.

Liu, X. and M. Heino (2010). "Global Warming and International Fishery Management: Does Anticipation of the Temperature Change Matter?" Discussion Papers, Department of Finance and Management Science, Norwegian School of Economics and Business Administration (NHH) No. 2010/19, Dec 2010.